Switch to:
GuruFocus has detected 5 Warning Signs with Quanta Services Inc $PWR.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Quanta Services Inc (NYSE:PWR)
Beneish M-Score
-2.73 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Quanta Services Inc has a M-score of -2.73 suggests that the company is not a manipulator.

PWR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.63   Max: -0.61
Current: -2.73

-3.63
-0.61

During the past 13 years, the highest Beneish M-Score of Quanta Services Inc was -0.61. The lowest was -3.63. And the median was -2.49.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Quanta Services Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9158+0.528 * 0.9206+0.404 * 1.0041+0.892 * 1.0104+0.115 * 1.0366
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0906+4.679 * -0.034-0.327 * 0.904
=-2.73

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,500 Mil.
Revenue was 2102.966 + 2042.186 + 1792.43 + 1713.737 = $7,651 Mil.
Gross Profit was 307.688 + 302.582 + 200.217 + 203.313 = $1,014 Mil.
Total Current Assets was $2,289 Mil.
Total Assets was $5,354 Mil.
Property, Plant and Equipment(Net PPE) was $1,174 Mil.
Depreciation, Depletion and Amortization(DDA) was $202 Mil.
Selling, General & Admin. Expense(SGA) was $653 Mil.
Total Current Liabilities was $1,205 Mil.
Long-Term Debt was $354 Mil.
Net Income was 87.583 + 73.742 + 16.562 + 20.496 = $198 Mil.
Non Operating Income was -0.393 + 0.752 + -1.103 + 0.081 = $-1 Mil.
Cash Flow from Operations was 184.244 + -69.335 + 66.528 + 199.739 = $381 Mil.
Accounts Receivable was $1,621 Mil.
Revenue was 1899.272 + 1939.438 + 1872.34 + 1861.386 = $7,572 Mil.
Gross Profit was 223.039 + 235.215 + 227.505 + 237.906 = $924 Mil.
Total Current Assets was $2,278 Mil.
Total Assets was $5,214 Mil.
Property, Plant and Equipment(Net PPE) was $1,102 Mil.
Depreciation, Depletion and Amortization(DDA) was $198 Mil.
Selling, General & Admin. Expense(SGA) was $593 Mil.
Total Current Liabilities was $1,204 Mil.
Long-Term Debt was $475 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1500.115 / 7651.319) / (1621.133 / 7572.436)
=0.19605966 / 0.21408342
=0.9158

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(923.665 / 7572.436) / (1013.8 / 7651.319)
=0.12197726 / 0.13250003
=0.9206

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2288.745 + 1174.094) / 5354.059) / (1 - (2277.519 + 1101.959) / 5213.543)
=0.35323107 / 0.3517886
=1.0041

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=7651.319 / 7572.436
=1.0104

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(197.693 / (197.693 + 1101.959)) / (201.925 / (201.925 + 1174.094))
=0.15211226 / 0.14674579
=1.0366

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(653.338 / 7651.319) / (592.863 / 7572.436)
=0.08538894 / 0.07829224
=1.0906

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((353.562 + 1205.228) / 5354.059) / ((475.364 + 1203.744) / 5213.543)
=0.29114173 / 0.32206659
=0.904

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(198.383 - -0.663 - 381.176) / 5354.059
=-0.034

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Quanta Services Inc has a M-score of -2.73 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Quanta Services Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.0510.77640.9861.0181.08390.98011.00061.03580.92090.9158
GMI 0.91830.96120.9391.10121.21270.84561.0291.02031.23680.9206
AQI 2.01840.94380.94431.04110.99950.86741.06611.08280.82761.0041
SGI 1.2591.42330.87781.09381.15551.41171.0831.20830.97741.0104
DEPI 1.33160.83411.18470.9611.03630.98211.22460.77910.90421.0366
SGAI 1.05260.90391.15040.90090.94970.91191.02991.20360.85981.0906
LVGI 0.58280.60650.93690.76261.4421.03121.05091.04651.70860.904
TATA -0.0244-0.024-0.0523-0.0186-0.01810.0386-0.01390.0081-0.0585-0.034
M-score -1.78-2.34-2.89-2.31-2.37-2.08-2.42-2.25-3.01-2.73

Quanta Services Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.11741.03220.91530.89960.87850.92410.96390.91620.95180.9158
GMI 1.09661.011.06011.06561.13051.24941.22051.20071.05360.9206
AQI 0.92241.08280.92071.09940.94830.82760.96590.81530.99171.0041
SGI 1.16851.21251.1951.13741.03320.9740.9430.92890.96711.0104
DEPI 1.1460.76250.97820.74060.70810.92390.74690.98060.99991.0366
SGAI 1.14041.2071.04781.09220.98850.85740.9420.94651.01041.0906
LVGI 1.10751.04651.19131.38271.61621.70861.53451.33661.00420.904
TATA 0.02220.0108-0.0297-0.0503-0.0428-0.0603-0.0677-0.0656-0.0573-0.034
M-score -2.14-2.25-2.60-2.78-2.95-3.01-2.97-3.00-2.80-2.73
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK